President Donald Trump, accompanied by Education Secretary Betsy DeVos (left), waves to members of the media as he takes a tour of Waukesha County Technical College in Pewaukee, Wis., on June 13 Democratic attorneys general in 18 states and the District of Columbia are suing Education Secretary Betsy DeVos over her decision to suspend rules meant to protect students from abuses by for-profit colleges. The lawsuit was filed Thursday, July 6, 2017, in federal court in Washington and demands implementation of borrower defense to repayment rules.AP file

By DANIELLE DOUGLAS-GABRIELWashington Post

Sunday, July 09, 2017

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Step by step, the Trump administration is walking back policies and rules in higher education that its predecessor said were needed to protect students who rely on federal funding to pursue a degree.

Supporters say the Education Department under President Donald Trump is restoring balance after overreach during the Obama administration led to punitive regulations and aggressive policing that threatened the stability of schools and student loan companies. But consumer advocates say they fear Trump is unraveling years of work to ensure borrowers are placed ahead of profits.

Through the first half of the year, the department led by Education Secretary Betsy DeVos has withdrawn, delayed or announced plans to revamp more than a half dozen Obama-era measures involving federal student aid.

“The U.S. Department of Education’s illegal refusal to implement these protections means that more students will continue to drown in debt, while taxpayers foot the bill,” said Massachusetts Attorney General Maura Healey, a Democrat.

What started as a slow chipping away of Obama administration directives has turned into full-fledged overhaul of regulations.

In March, the department announced schools would be given more time to appeal poor reviews under what is known as the “gainful employment” rule, which threatens to withhold student aid from vocational programs whose graduates consistently end up with more debt than they can repay.

By June 14, the department announced an effort to rewrite the rule entirely. Weeks later, DeVos said schools would be given another year to comply with certain provisions and tell students how their programs are performing.

“The secretary’s priority is to put students’ needs first, and the department is committed to doing just that,” said department spokeswoman Liz Hill. “Every step taken to reduce regulatory burdens or to enter a negotiated rulemaking process is done with the best interests of students in mind.”

Another much-debated rule is “borrower defense to repayment,” which erases federal loans for students whose colleges used illegal or deceptive tactics to get them to borrow money to attend. On the books since the 1990s, the rule was revised last year to speed up and simplify the claims process and shift more of the cost of discharging loans onto schools.

Before those changes could take effect July 1, DeVos suspended them last month and said she would convene a committee to reconsider the matter. That led Healey and 18 other Democratic state attorneys general to file a lawsuit Thursday seeking to prevent any delay of the updated borrower-defense rule.

DeVos said her action will have no impact on tens of thousands of pending claims, but some borrowers say the process has already ground to a halt.

In early January, Jessica Madison received a notice from the department approving the forgiveness of $19,000 she amassed in debt for a paralegal program at Everest College in Clearwater, Fla., a for-profit school that was operated by now-defunct Corinthian Colleges. The notice, reviewed by the Washington Post, said the debt would be discharged within 60 to 120 days, but it was not.

Instead, Madison said the government has been garnishing her paycheck to recoup the debt. She said she has struggled to repay the money since leaving Everest in 2009 because it took her nearly three years to land a full-time job.

“I wasn’t able to have power for weeks because my checks couldn’t cover the bills,” Madison said. “This has put me in a deep hole that is taking long to crawl out of.”

Hill declined to discuss Madison’s case. But the department spokeswoman said “too many students ... have gotten caught up in a convoluted and confusing process set up by the previous administration.”

“It is our aim to make sure students are protected from predatory practices, taxpayers are protected and universities and colleges have clear, fair and balanced rules to follow,” she added.

Hill said the department has discharged debt for nearly half of the 16,453 approved claims it inherited from the Obama administration. About 64,000 remaining applications for relief, some three years old, are still under review.

For-profit colleges contend that the Obama administration’s initiatives were designed to cripple their schools. DeVos has voiced sympathy with these complaints, calling the gainful-employment rule “overly burdensome and confusing” for schools.

But advocates of the rule say it protects students from shoddy programs and high loan-default rates. Ninety-eight percent of the programs that failed to meet the standards outlined in the rule are offered by for-profit colleges.

Rewriting the gainful-employment and borrower-defense rules is part of a broader effort at the department to reduce regulation.

DeVos said last month that a regulatory reform task force is scrutinizingover 150 rules and more than 1,700 pieces of policy guidance. Many could be targeted for repeal or modification.

“If you had to summarize the actions that we’ve seen so far from the Department of Education, it’s an effort to reduce the federal footprint,” said Terry Hartle, senior vice president of the American Council on Education.

The council, which represents college and university presidents, had been skeptical during the Obama administration of what it viewed as a trend toward federal micromanagement of schools.

The task force is co-chaired by Robert Eitel, a former attorney at for-profit college operator Bridgepoint Education, who is now senior counsel to DeVos. Critics say the task force is failing to account for the views of students.

“At no point are they asking for the input of student loan borrowers or people enrolled in college,” said Alexis Goldstein, senior policy analyst at the progressive Americans for Financial Reform. “The common theme here is enriching a certain number of private actors at the expense of protections for borrowers.”

Goldstein cited DeVos’ withdrawal of three Obama-era memos designed to strengthen consumer protections for student loan borrowers. One required the department to consider a loan servicer’s record, including consumer complaints and state investigations, before awarding a contract.

“It was a straightforward memo,” Goldstein said. “Getting rid of it just paves the way for student loan companies that have committed abuses against borrowers to continue on.”

Department spokeswoman Hill said the directives contained “shifting deadlines, changing requirements and even regulations that contradicted themselves.” She said the department “retained all of the meaningful borrower protections” in its amended service contract.

But therevisedcontract stripped out a requirement that the company have specialists on hand to aid people in delinquency, a feature meant to stem loan defaults.

DeVos frames the changes she has made as necessary alterations to complex policies. Not only does she want to recast Obama-era regulations, she also has suggested that Congress should consider scrapping the Higher Education Act of 1965 and starting over.

“It doesn’t make a lot of sense to simply amend a 50-year-old law,” DeVos said in June to the Association of Public and Land-grant Universities. “Adding to a half-century patchwork will not lead to meaningful reform. Real change is needed.”

There are no signs that Congress will act on that recommendation. But it seems clear that the administration is seeking to shift the federal role in higher education. What’s not clear is the end goal. For all of the measures that have been repealed, the department has been short on the specifics of replacements.

“The early moves seem to be responsive to industry pet peeves,” said Rohit Chopra, the former student loan ombudsman at the Consumer Financial Protection Bureau. “It’s just not clear to me what’s the vision.”